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Graduates: Pay

Question for Department for Business, Innovation and Skills

UIN 28236, tabled on 24 February 2016

To ask the Secretary of State for Business, Innovation and Skills, what estimate he has made of the distribution of the graduate premium by each decile of graduate lifetime earnings.

Answered on

29 February 2016

The most recent BIS commissioned research (Walker and Zhu, 2013[1]) shows that, on average, a male graduate will earn £168,000 more, and a female graduate £252,000 more, over their lifetime than someone without a degree but with 2 or more A-levels, net of income tax, VAT, National Insurance and student repayments (2012 prices).

Walker & Zhu (2013) also provide a breakdown of these figures across the graduate earnings distribution, as set out in Table 1.[2]

Table 1: Graduate premiums from completion of a first degree for individuals by gender across earnings deciles

Individual Net Present Value

Graduate earnings deciles

Average

1st

2nd

3rd

4th

5th

6th

7th

8th

9th

Male

168

173

168

163

161

167

157

154

166

206

Female

252

247

240

241

241

245

255

252

285

265

Measurement unit £1,000

[1] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/229498/bis-13-899-the-impact-of-university-degrees-on-the-lifecycle-of-earnings-further-analysis.pdf

[2] As before, these estimates are net of tax and other costs, but also vary due to effect of income tax thresholds and the progressive nature of the student loan repayment model. For example you can see male graduates in the 1st and 2nd earnings deciles have higher graduate premiums than those between the 3rd and 8th earnings deciles as they are less likely to repay all of their student loan and will pay proportionately less income tax, National Insurance and VAT.

Answered by

Department for Business, Innovation and Skills
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